Click to read: Premium Tambahan Kereta Lama
I am not sure whether our industry is having too many spoke-persons, our Deputy Finance minister, Datuk Chor on 6th June told the press that the government would be setting up a motor insurance pool to cater for the old vehicles, ie. vehicles aged > 10 years. This proposed pool is necessary because the current insurance market was perceived by everyone that buying insurance for old vehicles is indeed very difficult and further more there were complaints about agents and insurers ganging up to “force” Insured into buying additional policy such as Auto-PA. What pool was he taking about? Is he referring to the MMIP?
Datuk Chor went on to say the maximum loading is 50% of the basic tariff premium and would be available at all the POS Malaysia’s outlets. BUt he never mentioned whether this is applicable for third party policy or comprehensive….
On the 16th June, another Deputy Financial Minister, Dato Awang Adek also spoke up, his was about risk-based motor insurance premium as a better alternative to the current tariff based premium. If you must say it, he should have stressed on detariffication of the Motor premium.
The fact remained irregardless what was being said by politicians todate, insurers are still having difficulties adjusting to the new risk-based capital regime. This regime imposes numerous obligations and capital risk charge computation methods including stricter actuarial assumptions like pegging insurance technical liabilities at a minimum 75% confidence level. One very large insurance player seems to have proposed to BNM for an extension of their financial reporting from end-June to end-December; perhaps signifying their RBC related internal issues are not over yet – looks like just a tip of an iceberg. While adjusting for the conventional insurers are getting difficult, the takaful and the Lofsa registered reinsurers are expected to join in sometimes 2010 and 2011 – this may further add to BNM’s headache……
The premium for motor insurance must go up; certainly they must in order to realistically support the RBC regime but it is not likely toif that is to be done from raising the tariff premium – no, no, no…. the rakyat would not agree – so says the politicians! This leaves no option except for detariff of the nation’s two large premium segments, ie. Fire and Motor – they must go….